FOREX-Dollar, yen gain as economy worries grow

* Yen rallies as stocks fall, recession worries grow

* US jobless claims spike, dollar gains vs high-yielders

* Surprise Swiss interest rate cut hits Swiss franc

* Markets begin grappling with U.S. deflation fears

* For up-to-the-minute market news, click on FXNEWS (Updates prices, adds detail, adds Philly Fed data)

By Steven C. Johnson

NEW YORK, Nov 20 (Reuters) - The dollar and yen rose against the euro and other currencies from countries with high interest rates as fears of a deep global recession sent investors fleeing for the safest assets.

The Swiss franc CHF= also fell sharply after the Swiss National Bank unexpectedly slashed interest rates by a full percentage point, citing worsening economic conditions.

With anxiety about economic growth on the rise, investors continued yanking money out of risky assets such as stocks, commodities and high-yield currencies and parking it in U.S. government bonds or the Japanese yen, which many borrowed cheaply to finance investments elsewhere.

These safe-haven flows pushed two-year U.S. Treasury yields to a record low and pushed the high-yielding New Zealand dollar NZD= to its lowest level against the greenback since 2003. Oil fell below $50 a barrel CLc1, its lowest since May 2005.

Data showing the number of Americans filing for jobless benefits spiked to a 16-year high of 542,000 last week added to the unease, as did a report showing U.S. mid-Atlantic factory activity at an 18-year low. For details, see [ID:nN20514012].

"Anxiety about the financial markets is shifting to anxiety about fundamentals and the real economy, and that's keeping the overall levels of risk aversion very high," said Vassili Serebriakov, currency strategist at Wells Fargo in New York.

"We've had disappointing U.S. economic data and we believe the bear market in equities will continue, lending more support to the dollar and yen."

The dollar was last down 1 percent at 94.96 yen JPY= after earlier falling to 94.30 yen, a three-week low. The euro also fell 1 percent to 118.86 yen EURJPY=.

Against the dollar, the euro slipped 0.1 percent to $1.2510 EUR= while sterling fell 1.3 percent to $1.4769 GBP=. The dollar rose 0.7 percent to 1.2196 Swiss francs after the SNB cut interest rates. [ID:nLK597124].

The high-yield New Zealand dollar fell 2.6 percent to a nearly six-year low of US$0.5279 while the Australian dollar plunged 3.3 percent to US$0.6174 AUD=.